Requesting Inventories, Accountings, and other Information
As you became involved with your own estate planning or that of a loved one, one of the first questions that arose likely involved the exchange of information. When you’re the beneficiary of an estate, can you get an inventory of all of the estate’s assets? What about a copy of the Will and other legal documents? When you’re the Personal Representative of a trust, what do you have to tell the interested parties, and how often do you have to update this information?
Misunderstandings about the rights and duties of interested parties can lead to conflict and even, in extreme cases, legal battles and lawsuits. When both the beneficiary and Personal Representative/Trustee understand their rights and duties, much of this unpleasantness can be avoided.
One of the first duties of the Personal Representative is to prepare an inventory of the estate. This must be completed within three months of being appointed. C.R.S. §15-12-706. To access free downloads of the necessary inventory forms, simply visit the Colorado Court forms web page. Forms that have not been fully completed, such as blank spaces where bank account numbers or actual appraised value of real estate should be can often lead to legal disputes. For this reason, it is important to ensure that the inventory forms are filled out accurately and thoroughly.
Once the estate inventory has been prepared, it does not necessarily need to be sent to both the beneficiaries and the court. Section 2 of C.R.S. §15-12-706 states that the personal representative shall send the inventory to interested persons who request it or file it with the court. In our legal opinion, all beneficiaries should request the estate inventory in order to avoid disputes and misunderstandings. For the same reason, all personal representatives should both file the inventory with the court and send a copy to everyone having an interest in the estate. If all parties act proactively and cover both possible scenarios, everyone has the opportunity to access and understand the appropriate information.
In addition to an inventory, all persons with an interest in the estate/probate case can and should request an accounting of all estate transactions. It’s important to note that the accounting is different from the inventory. The accounting should also be accompanied by supporting documents such as bank statements and time logs. The accounting form can be found on the Colorado Courts webpage for no charge. Thirty days after a personal representative is appointed they must file a document called Information of Appointment. C.R.S. 15-12-705. In this document, the personal representative notifies all persons with an interest that they are entitled to receive an accounting of the estate. Section (h) of C.R.S. 15-12-705.
In both Estate/Probate cases and in Trust matters, anyone named in the decedent’s Last Will and Testament or Trust has a right to receive a full copy of the document. If the Personal Representative or Trustee is denying you a copy of the Will or Trust, contact an attorney as soon as possible.
It is normal for it to take some time to investigate an estate, figure out the debts, assets, and other estate particulars. In our professional opinion, three months after a personal representative is appointed, an inventory and accounting should be requested by all persons with an interest in the estate. We recommend that this request be made by email to provide a written record of both the date of the request and any individuals involved. Almost all personal representatives list their email address in the Application or Petition opening the probate case. Our opinion is that the inventory and accounting should be completed and sent within 30 days after the request is made.
If any property not included in the original inventory comes to the knowledge of a personal representative, or if the personal representative learns that the value or description indicated in the original inventory for any item is erroneous or misleading, the personal representative has a duty to make a supplementary inventory or appraisement. This supplementary inventory should then be filed with the court if the original inventory was filed, or copies should be sent to interested persons who request the inventory. C.R.S. 15-12-708.
Unfortunately, many personal representatives do not follow their duties in complying with these requests. When this happens, the personal representative is in breach of their fiduciary duties and the court can issue sanctions or fines against the personal representative for failure to perform their duties properly. Consider hiring an attorney if this happens to assist with legal complications.
If you are the beneficiary or trustee of a trust, many times the trust will require a trustee to give annual reports to the beneficiaries or have customized terms for transparency. Carefully read the trust and consider having an attorney review the document with you. Colorado statutes also have requirements on a trustee’s duties to inform beneficiaries on all trust matters. The rules in the trust and the laws of Colorado sometimes conflict. It’s important to consult an attorney to research which of these conflicting positions are enforceable.
The term beneficiary is defined in C.R.S. 15-5-103(4)(a) meaning a person who has a present or future beneficial interest in a trust, vested or contingent.
Remainder beneficiaries are also considered parties in interest under Colorado Law. C.R.S. 15-1-1401(3)(c)(III) if the trust is not revocable or amendable, the parties in interest are each remainder beneficiary then in existence or, if any such remainder beneficiary has not attained majority or is otherwise incapacitated, the beneficiary’s legal representative under applicable law or the beneficiary’s agent under a durable power of attorney that is sufficient to grant such authority.
Under Colorado law, a trustee must keep adequate records of the administration of the trust. C.R.S. 15-5-810(1). This means that putting together an inventory and accounting should be a quick task since all trustees have a legal duty to keep records updated and accurate at all times.
A trustee must keep the qualified beneficiaries of the trust reasonably informed about the administration of the trust and of the material facts necessary for them to protect their interests. Unless unreasonable under the circumstances, a trustee shall promptly respond to a qualified beneficiary’s request for information related to the administration of the trust. C.R.S. 15-5-813(1). The trustee has a duty to notify beneficiaries within sixty days of the trustee’s contact information, a beneficiary’s right to receive a copy of the trust document, and the beneficiary’s right to a trustee’s report. C.R.S. 15-5-813(2).
A trustee’s report is similar to an inventory and accounting and the trustee should use the Colorado approved forms for this document preparation as mentioned above. While a trustee must send the report at least annually to trust beneficiaries and other persons with an interest in the trust (C.R.S. 15-5-813(3)), if a report is requested, a report should be provided within sixty days.
If a trustee refuses to provide information requested by a beneficiary, it is a breach of the trustee’s duties. The court can compel the trustee to comply with the request, stop the trustee from acting further, remove the trustee, and in extreme cases sanction or fine the trustee.
Since Personal Representatives, Trustees, Guardians, Conservators, and Power of Attorney Agents all have fiduciary duties, these persons cannot usually claim they did not know the rules or merely made a mistake. Fiduciaries all have a responsibility to know all the rules pertaining to their position or hire legal counsel to advise them on their duties and responsibilities.
In estates/probate cases and trust matters, full transparency almost always helps to avoid costly litigation. We recommend that providing more information and making contact more often with the other persons involved is almost always a reasonable way to handle these situations.